Cash Flow

1. Cash that comes into or goes out of a person's or company's account. Cash flow can come from any number of sources and is crucial for a business' continued operation and a person's continued survival. Cash inflow may come from wages, salary, sales, loans, revenue from operations, or even personal gifts. Cash outflow usually comes from expenses and investments. It is crucially important to maintain a positive net cash flow insofar as possible.

cash flow

The amount of net cash generated by an investment or a business during a specific period. One measure of cash flow is earnings before interest, taxes, depreciation, and amortization. Because cash is the fuel that drives a business, many analysts consider cash flow to be a company's most important financial statistic. Firms with big cash flows are frequently takeover targets because acquiring firms know that the cash can be used to help pay off the costs of the acquisitions. See also free cash flow.

Case Study Financial analysts generally consider cash flow to be the best measure of a company's financial health. Increased cash flow means more funds are available to pay dividends, service or reduce debt, and invest in new assets. On the other hand, reported net income is heavily influenced by a firm's accounting practices. Reduced income generally means lower taxes and more cash, thus the same accounting practices that reduce net income can actually increase cash flow. A firm with large amounts of new investments and corresponding high depreciation charges might report low or negative earnings at the same time it has large cash flows to service debt and to acquire additional assets. Cable companies have huge investment requirements and are typical of firms that may be quite healthy in spite of reporting net losses. In early 1996, TCI Communications, at the time the nation's largest cable operator, reported fourth-quarter results that included a net loss of $70 million, more than double the loss reported in the year-earlier quarter. At the same time, the firm added more than a million new customers and reported a 25% increase in revenues. It also reported a 5% increase in cash flow. Thus, although TCI reported an additional loss, the quarter was generally considered quite successful. Operating cash flow, calculated as cash flow (the sum of net income and noncash expenses such as depreciation, depletion, and amortization) plus interest expense plus income tax expense, is an important consideration in corporate acquisitions because it indicates the cash flow that is available to service a firm's debt.

Cash flow.

Cash flow is a measure of changes in a company's cash account during an accounting period, specifically its cash income minus the cash payments it makes.

For example, if a car dealership sells $100,000 worth of cars in a month and spends $35,000 on expenses, it has a positive cash flow of $65,000. But if it takes in only $35,000 and has $100,000 in expenses, it has a negative cash flow of $65,000.

Investors often consider cash flow when they evaluate a company, since without adequate money to pay its bills, it will have a hard time staying in business.

You can calculate whether your personal cash flow is positive or negative the same way you would a company's. You'd subtract the money you receive (from wages, investments, and other income) from the money you spend on expenses (such as housing, transportation, and other costs).

If there's money left over, your cash flow is positive. If you spend more than you have coming in, it's negative.

cash flow

the money coming into a business from sales and other receipts and going out of the businesses in the form of cash payments to suppliers, workers, etc. Cash receipts and cash payments in a trading period are not necessarily the same as the accounting revenues and cost applicable to that same period, because customers need not pay cash for goods sold until some time afterwards while the firm may not pay for materials and services used until afterwards. Fig. 18 overleaf shows the main causes of disparities between cash flow and profit. See SOURCES AND USES OF FUNDS STATEMENT.

cash flow

the money coming into a business from sales and other receipts and going out of the business in the form of cash payments to suppliers, workers, etc.

cash flow

(1) Noun:The cash available from an investment after receipt of all revenues and after payment of all bills.(2) Verb:The process of creating cash flow,as in “I think that property will start to cash flow in about a year.”A property can have positive cash flow (good) or negative cash flow (usually bad).Cash flow is not the same thing as profitability.A property can be profitable,meaning gross income less expenses, depreciation, and interest on debts results in a positive number. That same property can have a negative cash flow because of the need to pay principal payments on loans or expend money for something that represents a capital expenditure,like a new roof.

NEW YORK, March 28, 2014 /PRNewswire/ -- Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, today announced the launch of a free tool for bond cashflow and price yield calculations: TreppTrade(TM) Quick Analysis.

Jayne Oates, Head of Service Delivery at CashFlows added: “The meeting was extremely productive with Mark Carney taking a keen interest in our feedback and supportive of more competition in the market.

The CashFlows Account brings together a wide range of domestic and international payment standards and consolidates business banking services into one account, simplifying the day-to-day management and banking reconciliation of many businesses.

This new solution complements CashFlows' existing contactless card programme for businesses using the CashFlows Account, a fully integrated business account that brings together business account and merchant account facilities.

To support this programme, CashFlows partnered with Young Enterprise to enable their business for the first time to accept card payments directly from their website or over the phone by using CashFlows' payment processing services and innovative technology.

According to the study, which was conducted by YouGov for CashFlows, 24 per cent of small businesses surveyed (over 1 million in Great Britain), pay an average of 1,792 pounds on business banking charges every year, such as transaction fees[2].

Commenting on the launch of the CashFlows e-invoicing solution, Nick Ogden, CEO of CashFlows said: "We are incredibly pleased to be providing businesses with this fully integratede-invoicing solution whichis proving to be another valuable tool inimprovingabusiness'cash flow.

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